Committee Report

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115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-1003
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STATE OF MODERN APPLICATION, RESEARCH, AND TRENDS OF IOT ACT
_______
November 2, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Walden, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 6032]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 6032) to direct the Secretary of Commerce to
conduct a study and submit to Congress a report on the state of
the internet-connected devices industry in the United States,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Action................................................. 3
Committee Votes.................................................. 3
Oversight Findings and Recommendations........................... 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 5
Statement of General Performance Goals and Objectives............ 5
Duplication of Federal Programs.................................. 5
Committee Cost Estimate.......................................... 5
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 5
Disclosure of Directed Rule Makings.............................. 5
Advisory Committee Statement..................................... 5
Applicability to Legislative Branch.............................. 6
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill, as Reported............ 6
PURPOSE AND SUMMARY
The State of Modern Application, Research, and Trends of
IoT Act (SMART IoT Act) directs the Secretary of Commerce to
establish a compendium of information regarding the Internet of
Things (IoT) ecosystem. The purpose of the SMART IoT Act is for
the Secretary of Commerce (Secretary) to create a first-of-its-
kind compendium on both private industry and Federal government
activities with respect to IoT efforts.
With respect to the private industry, the Secretary is to
identify which industry sectors develop IoT devices, both
consumer and industrial, and which industry-based bodies have
developed or are developing standards, as well as identifying
those standards. With respect to the Federal government, the
Secretary is to identify which agencies have jurisdiction over
IoT, current interagency activities on IoT issues, and what
Federal regulations, guidelines, standards, and other policies
exist.
The report will advance the development and deployment of
IoT based solutions by providing industry-based standards and
government resources related to IoT in a single location.
Consolidating this information should help identify whether any
current Federal activity is inconsistent, duplicative, or if
there are gaps in needed Federal activity. Identifying this
information is intended to help advance interagency
collaboration and provide information regarding industry-based
developed or developing standards.
BACKGROUND AND NEED FOR LEGISLATION
IoT refers to a growing network of connected devices
equipped with microchips, sensors, and wireless communication
capabilities. These smart devices connect through a network to
the cloud or a datacenter to share, exchange, and analyze data
to gather insights used to solve problems or enable new
capabilities. IoT devices are used to optimize everything from
home appliances to automobiles and manufacturing to community
services. IoT devices offer benefits to businesses, consumers,
and society. For example, advancements in vehicle technology,
such as the development and deployment of self-driving cars,
have the potential to improve roadway safety and save thousands
annually. Communities are integrating technology into their
infrastructure for a variety of purposes, including to reduce
overall traffic congestion and to improve waste management
services.\1\
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\1\https://www.mercatus.org/publication/projecting-growth-and-
economic-impact-internet-things
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Consumer applications, such as wearable technology, in-home
smart speakers, and smart appliances, also offer potential
benefits directly to consumers. Increasingly, consumers are
turning to wearable technology, as this market is expected to
reach 162.9 million units by 2020.\2\ Business IoT
applications, such as smart manufacturing, are already
improving efficiency and productivity of operations, which can
ultimately reduce costs to end users. Smart manufacturing uses
real-time, accurate information to allow companies to improve
workforce management, seek new business opportunities, and help
drive out costs of inefficiency. As a result, it is projected
that the installed base of manufacturing IoT devices will
increase to 923 million by 2020.\3\
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\2\http://www.businessinsider.com/wearable-technology-iot-devices-
2016-8
\3\http://www.businessinsider.com/internet-of-things-in-
manufacturing-2016-10
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IoT is revolutionizing a variety of industries and having a
substantial effect on major U.S. economic sectors. By 2025, IoT
is projected to create $1.1 trillion to $2.5 trillion in value
annually in the health sector; $.9 trillion to $2.3 trillion in
value annually in manufacturing; and $100 billion to $300
billion in value annually in urban infrastructure.\4\ Analysts
predict that by 2020, annual revenues for IoT vendors selling
hardware, software, and other IoT solutions may exceed $470
billion\5\ and that by 2025, the IoT market will grow from an
installed base of 15.4 billion devices in 2015 to 75.4
billion.\6\ This market is projected to create 4.5 million
developer jobs by 2020.
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\4\https://www.mercatus.org/publication/projecting-growth-and-
economic-impact-internet-things
\5\https://www.forbes.com/sites/louiscolumbus/2016/11/27/roundup-
of-internet-of-things-forecasts-and-market-estimates-2016/#205c3fa4292d
\6\Id.
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IoT cuts across many industry sectors and multiple Federal
agency jurisdictions. In fact, many Federal agencies are
developing and distributing IoT-related guidelines and making
policy recommendations.\7\ Currently, many of the efforts and
information that exist about the IoT ecosystem are siloed,
whether it be industry-based best practices and standards or
Federal action. No single-source compilation of this
information exists, and through meetings with stakeholders and
hearings on this legislation, it became clear that such a
compendium, as created by the SMART IoT Act, will help advance
IoT development and deployment of IoT-based solutions.
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\7\https://www.gao.gov/assets/690/686106.pdf
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COMMITTEE ACTION
On May 22, 2018, the Subcommittee on Digital Commerce and
Consumer Protection held a hearing on a discussion draft
entitled ``State of Modern Application, Research, and Trends of
IoT Act'' or ``SMART IoT Act.'' The Subcommittee received
testimony from:
Tim Day, Senior Vice President, Chamber
Technology Engagement Center, U.S. Chamber of Commerce;
Dipti Vachani, Vice President, Internet of
Things Group, General Manager of the Strategy and
Solutions Engineering Division, Intel; and,
Michelle Richardson, Deputy Director,
Freedom, Security, and Technology Project, Center for
Democracy and Technology.
On June 13, 2018, the Subcommittee on Digital Commerce and
Consumer Protection met in open markup session and forwarded
H.R. 6032, without amendment, to the full Committee by a voice
vote. On July 12, 2018, the full Committee on Energy and
Commerce met in open markup session and ordered H.R. 6032,
without amendment, reported to the House by a voice vote. H.R.
6032 was similar to the discussion draft.
COMMITTEE VOTES
Clause 3(b) of rule XIII requires the Committee to list the
record votes on the motion to report legislation and amendments
thereto. There were no record votes taken in connection with
ordering H.R. 6032 reported.
OVERSIGHT FINDINGS AND RECOMMENDATIONS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held a hearing and made
findings that are reflected in this report.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
6032 would result in no new or increased budget authority,
entitlement authority, or tax expenditures or revenues.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
Pursuant to clause 3(c)(3) of rule XIII, the following is
the cost estimate provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 13, 2018.
Hon. Greg Walden,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 6032, the SMART
IoT Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Stephen
Rabent.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.
H.R. 6032--SMART IoT Act
H.R. 6032 would direct the Department of Commerce to study
and report on the state of the industry for internet-connected
devices. The study would include a survey of industry sectors
that develop internet-connected devices, the status of
industry-based standards, and a description of the ways
entities develop, use, and promote those devices. The study
also would include a list of federal agencies with jurisdiction
over the industry and all federal and industry-based
regulations, guidelines, and policies on internet-connected
devices that have been implemented. Finally, the report would
include recommendations for growing the economy through
advancing internet-connected devices.
Using information from the National Telecommunications and
information Administration about the cost of similar efforts,
CBO estimates that implementing H.R. 6032 would cost $2 million
to conduct the study and issue the report; such spending would
be subject to the availability of appropriated funds.
Enacting H.R. 6032 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 6032 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
H.R. 6032 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
The goal of H.R. 6032 is to create a compendium of
information with respect to which industry sectors are
developing internet-connected devices and which Federal
agencies have jurisdiction over entities in those industry
sectors. Such a compendium of information will help identify
whether any current Federal activity is inconsistent,
duplicative, or if there are gaps in Federal activity.
Identifying this information is intended to help advance
interagency collaboration and provide information regarding
industry-based developed or developing standards.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 6032 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
COMMITTEE COST ESTIMATE
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS
In compliance with clause 9(e), 9(f), and 9(g) of rule XXI
of the Rules of the House of Representatives, the Committee
finds that H.R. 6032 contains no earmarks, limited tax
benefits, or limited tariff benefits.
DISCLOSURE OF DIRECTED RULE MAKINGS
Pursuant to section 3(i) of H. Res. 5, the Committee finds
that H.R. 6032 contains no directed rule makings.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
Section 1 provides that the Act may be cited as the ``State
of Modern Application, Research, and Trends of IoT Act'' or the
``SMART IoT Act.''
Section 2. Study and report on Internet of Things
Section 2 provides that the Secretary of Commerce shall
conduct a study on the state of the internet-connected devices
industry. This section requires the Secretary, through outreach
to the private sector, to develop and conduct a survey of
entities in the internet-connected devices industry to develop:
a list of the industry sectors that develop internet-connected
devices; a list of public-private partnerships focused on the
adoption and promotion of internet-connected devices, as well
as industry-based bodies, including international bodies, that
have developed or are developing industry standards; the status
of those industry-based standards; and a description of the
ways in which entities or industry sectors develop, use, or
promote the use of internet-connected devices.
Section 2 provides that the Secretary must develop a
comprehensive list of Federal agencies with jurisdiction over
entities in the IoT industry; identify which Federal agency or
agencies entities in the internet-connected devices industry
interact with; identify all interagency activities that are
taking place among Federal agencies; develop a brief
description of the jurisdiction and expertise of the Federal
agencies who have jurisdiction over entities in the internet-
connected devices industry; identify all regulations,
guidelines, mandatory standards, voluntary standards, and other
policies that currently exist; and identify Federal Government
resources that exist for consumers and small businesses to
evaluate internet-connected devices.
Section 2 requires the Secretary, within 1 year of
enactment, to submit a report to Congress that contains the
results of the study and recommendations for the growth of the
U.S. economy through the secure advancement of internet-
connected devices.
This section defines Federal agency as defined in section
551 of title 5, United States Code and internet-connected
device as a physical object that is capable of connecting to
the internet, either directly or indirectly through a network,
to communicate information at the direction of an individual
and has computer processing capabilities for collecting,
sending, receiving, or analyzing data.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
This legislation does not amend any existing Federal
statute.
[all]